Corp. Code, § 8721 · Chapter 17. General Provisions Relating to Dissolution
Corp. Code, § 8721
Text — As published in the Legislative Counsel's database, tables dated October 18, 2026 (pubinfo_2025.zip)
(a) Whenever in the process of winding up a corporation any distribution of assets has been made, otherwise than under an order of court, without prior payment or adequate provision for payment of any of the debts and liabilities of the corporation, any amount so improperly distributed to any person may be recovered by the corporation. Any of such persons may be joined as defendants in the same action or be brought in on the motion of any other defendant.
(b) Suit may be brought in the name of the corporation to enforce the liability under subdivision (a) against any or all persons receiving the distribution by any one or more creditors of the corporation, whether or not they have reduced their claims to judgment.
(c) Members who satisfy any liability under this section shall have the right of ratable contribution from other distributees similarly liable. Any member who has been compelled to return to the corporation more than the member’s ratable share of the amount needed to pay the debts and liabilities of the corporation may require that the corporation recover from any or all of the other distributees such proportion of the amounts received by them upon the improper distribution as to give contribution to those held liable under this section and make the distribution of the assets fair and ratable, according to the respective rights and preferences of the memberships, after payment or adequate provision for payment of all the debts and liabilities of the corporation.
(d) As used in this section, “process of winding up” includes proceedings under Chapters 15 (commencing with Section 8510) and 16 (commencing with Section 8610) and also any other distribution of assets to persons made in contemplation of termination or abandonment of the corporate business.
Notes and commentary — not statutory text
History
Amended by Stats. 1979, Ch. 724.
Source of truth
- Edition
- As published in the Legislative Counsel's database, tables dated October 18, 2026 (pubinfo_2025.zip)
- Official file
- https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=CORP§ionNum=8721.
- Text hash
- sha256 ce2e70c1053b67515a4bc8400c32e97e1b0659aee05d1fd3e37d3de7d8a00642
- Composed by
- compose_ca.py 2026-10-22: the Legislative Counsel's CAML content files read by a tokenizer (caml_readers.reader_a); an independent xml.etree reading (caml_readers.reader_b) agrees on every section
This section cites
Provisions in this library that the text above cites, as it prints each citation. A range cited as “ss. 61.13-61.16” links its first and last provisions.
Corporations Code
- Corp. Code, tit. 1, div. 2, pt. 3, ch. 15Involuntary DissolutionPrinted as Chapters 15 (commencing with Section 8510) and 16 (commencing with Section 8610)
- Corp. Code, tit. 1, div. 2, pt. 3, ch. 16Voluntary DissolutionPrinted as Chapters 15 (commencing with Section 8510) and 16 (commencing with Section 8610)
Procedural information only. Not legal advice and not a substitute for the advice of an attorney. Confirm the current text with the official publisher before relying on it.